Marimekko chart showing revenue mix for recorded music in 2016, based on data from RIAA

Digital Subscriptions Dominate Recorded Music Revenue in 2016

Subscriptions and streaming accounted for $3.9B of the $7.7B recorded music revenue.  Within subscriptions and streaming, about $2.5B came from paid subscription services like Apple Music and the paid version of Spotify and $884M came from digital radio distributions (e.g., Pandora or SiriusXM).  These categories were far larger than digital permanent downloads ($2.0B in total) and physical music sales ($1.7B).  In addition, digital subscription and streaming revenue grew 69% between 2015 and 2016, while downloads and physical media sales shrunk 22% and 16%, respectively.  The data for the Marimekko chart below is based on an annual report published by the Recorded Industry Association of America.  The report contains data and charts that further explain the trends in this industry over the past few years.  For a perspective on how much the top musicians earn, check out this Chart of the Week.Marimekko chart showing revenue mix for recorded music in 2016, based on data from RIAA

 

The most difficult task in preparing this chart was understanding the categories of revenue that the RIAA uses, summarizing them, and describing them in a chart.  Their categories include SoundExchange Distributions and Limited Tier Paid Subscriptions.  The former I changed to Digital Radio after some research.  The latter I grouped was relatively small so I grouped it with Paid Subscriptions.

After I made the chart based on the full data from the RIAA, I created an Other category for each bar and placed the smaller revenue segments in it.  These included ringtones and ringbacks in downloads ($40M) and music videos in physical ($58.4M).  I also grouped synchronization revenue ($204M) with digital permanent downloads.  I sorted my chart so that the biggest segments were on the bottom of each bar.  I colored the segments so that each bar went from dark to light shades of the same color.

I added a data row to the bottom of the chart to show the growth of each category.  The growth added to the story that digital subscriptions and downloads were the dominant market category.

Here is the chart in SlideShare to download and edit using Mekko Graphics: